God’s Own Country leaves Russians high and dry

Feb 11, 2015

Alexandra Katz

specially for RIR

Drinking pattern of Kerala is different from any other state. Source: Alexandra Katz

Many Russian tourists travelling to Kerala wonder why buying a bottle of whiskey or ordering a beer in a restaurant in the state is such an impossible chase. RIR tried to find out the causes of prohibition in “God’s Own Country” and its adverse impact on tourism.

Kerala
made international headlines in August last year when the Oommen Chandy-led
United Democratic Front government introduced a new liquor policy leading to
the closure of 730 bars, barring a dozen of five-star outlets. The state
government also implemented a ban on the sales of Indian Made Foreign Liquor
(IMFL), or Indian-made hard drinks like whisky, vodka, brandy and rum over the
next 10 years. The Supreme Court later
challenged the logic of prohibition. Many professional associations and social
activists protested, and finally the policy was put on hold.

Chasing a drink…

While
the prohibition hurt Kerala on political and communal grounds, it also
threatened the industry contributing about 10 per cent to the GDP of “God’s own
country”. Many foreign tourists visit Kerala for its picturesque beaches, yoga
and ayurvedic treatment. Many of them, Russians especially, flock to Kerala for
the New Year vacation. While the New Year without red caviar on the table is
still imaginable, the festivities, without a bottle of sparkling champagne, is simply
not on.

Kirill
Koteshov, an artist from St-Petersburg, celebrated the New Year with his
friends in the tourist hub of Cochin. “To buy drinks for a New Year party we
had to go to the only liquor shop in the city at 8 am, and there was a queue
there already. The price of a champagne bottle was five times more than it
would have been in Russia; we had to cancel the plan to open it as the clock struck midnight”,
he recalls. “We ended up buying rum of unknown brand, and later in the night we
realised its quality was really bad”.

Kirill
as well as many other Russian tourists interviewed by the RIR correspondent in
Cochin, Varkala and Kovalam said that they had a hard time finding liquor shops
in Kerala, and most of alcohol sold there is of unknown local brands while the
prices are very high, compared to Goa or other states in India, even Russia for
that matter.

State curse

It
makes it even more amazing that tourists have problems finding alcohol shops in
Kerala: “God’s own country” is known as
the hardest drinking state in India. Johnson J. Edayaranmula, director of
Alcohol and Drug Information Centre India (ADIC-India), says Kerala has very
high per capita consumption rate - above 8 liters, and at times it crossed 21
and 24 liters per capita per annum. The World
Health Organization (WHO) 2010 data published in 2014 report reveals that
India’s average recorded and unrecorded alcohol per capita consumption of
alcohol was 4.3 liters. In Russia, for example, it is 15.1 liters.

“Drinking
pattern of Kerala is different from any other state. It is hazardous drinking,
drinking for intoxication that is a curse of the state, not the social
drinking,” says the expert.

According
to Edayaranmula, 5% of hospitalisations, 69% of crimes, 40% of road traffic
accidents, 80% of divorces and domestic violence in the state are linked to
alcohol abuse.

The
sales of liquor in Kerala have been under control of the government-owned
Kerala State Beverages Corporation Limited (BEVCO) for three decades, and
all its 338 retail shops look alike: a metal grill separating the seller and
customers and long queues outside the shop.

Liquor
is a highly taxed commodity in Kerala, with 100% excise duty, KSBC
margin, sales tax, and turnover tax and service tax. The total tax burden comes to about 350-400%, which
accounts for high prices. Liquor sales contribute more than 23 per cent to the
state’s revenue. The ADIC-India study revealed that Kerala’s revenue from
alcohol increased from US$ 6.5 million in FY 1987-88 to US$ 1.2 billion in FY
2013-14.

The
entire effort to limit sales of alcohol in the state, first by introducing
heavy taxes, then by restricting the working hours of the bars and now by
reducing the number of them aimed at limiting consumption. However,
Edayaranmula tells RIR that the government introduced prohibition without studying
ground realities, hence it faced fierce opposition. “After the next year
elections, this government will change and the new government will define the
new policy”, he says.

Biju
Ramesh, president of Kerala Bar Hotels Association (KBHA) which
has been in the forefront of prohibition debates, says most 418 bars closed by
the government earlier have recently restarted under “beer and wine” license.
He, too, believes that the new government will come to power next year and the
liquor policy will be revised.

Bad News for tourism

Naveen
Raj, the owner of a restaurant in Varkala whose liquor license was not renewed,
admits that he is losing on alcohol sales. However, he added that most of the
tourists come for food while alcohol is a secondary interest. “But Russians are
hard drinkers. If you go to a liquor shop in town, all Russians are standing
there in a queue,” he says. “The number of Russians are increasing in Kerala,
but most of them try to buy liquor on their own or ask their travel agents who
live here all season long, rent properties and lease it to the tourists, to do
that”.

Ramesh
told RIR that tourism, both foreign and domestic, was affected badly in the
current tourism year. “Lots of conferences shifted from here to Goa and
Bangalore. Speaking roughly, tourism was 50% low comparing to last year; one of
the reasons is that Kerala was marketed as a dry state even by the travel
agents”, he added.

The
Kerala government’s total revenue from tourism during 2013 amounted to US$ 3.7
billion, showing an increase of 12.22% over the previous year’s figure. The
Tourism Department is yet to announce the figure for 2014 year.

Victoria
Dmitrieva, translator, Indologist and individual tour organiser from
St.-Petersburg, who has been living in Kerala for the last seven years,
believes that the so-called liquor ban did not have any effect on tourism. “There are liquor shops everywhere in Kerala,
but yes, not many of them. Moreover, in every restaurant or bar they will serve
you drinks on request, although most of them do not have the licence. So it’s
not true that alcohol is not there in Kerala, it is available,” she told RIR.
“Frankly speaking, I am happy that it is not like in Goa where there is such an
epidemic of hard drunkenness and drug abuse”.

Kanakan
C, the manager of Green Palace hotel in Varkala, says in past 7 years the sales
of beer and wine in the restaurant attached to the hotel have been contributing
less than 10 per cent of the total revenue. Thus, he is less concerned about
not being able to serve other drinks to the clients. “We are focused on good food and good
service. I don’t remember clients going away just because we cannot serve some
drinks,” Kanakan says.

Kirill
and his friends found it much easier to buy drinks in Goa, yet they still
prefer Kerala for its beaches, cleanliness, nature and people. “Probably, next
time we would fly to Goa, buy booze and move to Kerala,” Koteshov says.

He
suggests that tourists befriend local people who will definitely know how and
where to get a drink or will guide to a local toddy shop which itself is a
great experience. Toddy is a cheap traditional drink with low alcohol content
produced from the fermented sap of the palm trees; it has been consumed in
Kerala and other Indian states since ancient times, mainly for health benefits.